However, it would retain five per cent in what it called preparation for further growth in India, according to sources. The other shareholders in BIAL include Larsen and Toubro (L&T) and Siemens AG.

A release from Zurich Airport said: “After the successful opening of the new Bangalore International Airport and meeting high international service standards, Zurich Airport prepares the ground for the next expansion in Bangalore, in-which Zurich Airport intends to divest 12 per cent of its venture in Bangalore to either an existing shareholder or a new strategic partner for the project in order to forge a strong development partnership for the next expansion. However, it did not name the new strategic partner that would replace Zurich Airport as a majority stakeholder in the airport project, established with an investment of Rs 2,470 crores.

Zurich Airport further said it is strongly committed to the Indian aviation market, will remain the operator of the airport and keep five per cent in the equity, including board representation. It intends to further grow in terms of operational management contracts in India with new projects.

Zurich Airport was the first among private players to be involved in the privatisation process of airports in India since it had been selected in 2001 as operator and co-investor for a new greenfield airport at Devanahalli. The airport commenced commercial operations in May 2008.
At present, BIAL is planning the next expansion of the airport, which includes an additional terminal and a second runway. With this decision, Zurich Airport has formally launched the ‘Right of First Refusal Process’ with a valuation expectation for 12 percent in BIAL shares of approximately CHF 100 Mio, before taxes. The divestment process is expected to take 4 months.

Further investment

Based on the experience of the past, Zurich Airport is willing to further invest in project opportunities in the Indian subcontinent together in a strong partnership and thus is committed to the modernisation of Indian Airport infrastructure by bringing the expertise of an international airport operator.

Speaking about the announcement made by Flughafen Zurich AG, Marcel Hungerbuehler, CEO of BIAL said: “Based on the Concession Agreement and the Shareholders Agreement which allows Flughafen Zurich AG to sell 12 percent of its stake and retain the remaining five percent this announcement is understood and respected. The management, functioning and operations at BIAL will continue as is. Our commitment to all our partners, employees and stakeholders will remain protected and unchanged.”